Stock Rises Double Digits Despite Market Turbulence
While the Australian stock market is once again reversing course due to the US government’s tariff madness and the expected severe impacts on the world economy, copper company American West Metals (WKN A3DE4Y / ASX AW1) is seeing double-digit gains today. The reason is that the company, led by MD Dave O’Neill, has secured strategic financing for its DSO copper project Storm in Canada’s Nunavut!
Strategic Collaboration
As American West announces early this morning, they have agreed to a strategic partnership and collaboration with the globally operating metal trading, consulting, and financing company Ocean Partners for the development and financing of the Storm project. The binding agreement initially provides for Ocean Partners to invest $2 million USD in American West through a private placement, allowing the Australians to immediately continue their work on the project.
Crucially, Ocean Partners has also committed to providing up to 80% (!) of the initial investment costs for the copper project through a senior secured credit facility! However, American West still needs to submit a bankable feasibility study and formal documentation. Tasks that Dave O’Neill’s team will certainly tackle with high urgency.
Offtake Agreement Concluded
Furthermore, Ocean Partners and American West have concluded a binding offtake agreement as a prerequisite for the private placement, according to which Ocean Partners will have access to 100% of the copper and silver product that American West outlined in the recently published preliminary economic assessment (PEA) (We reported.).
But American West will not only benefit financially from the partnership with Ocean Partners, but also utilize the company’s technical expertise. The new partners will work closely together to jointly optimize and advance the necessary development work for the Storm project and thus define the best possible outcomes for the project.
Taurus Mining Also Contributes Further Millions
As if that weren’t enough, American West’s existing partner Taurus Mining Royalty has agreed to provide the second tranche of the agreed royalty financing amounting to $3.5 million USD in light of the positive results of the PEA. The company is set to receive $2.8 million USD of this later this month!
Work on Storm Continues at Full Speed
American West will use the fresh capital to further advance the Storm project. This primarily includes expanding exploration activities, including drilling near the planned mine and on regional exploration targets.
Simultaneously, work will begin or continue on preparing a pre-feasibility study (PFS) and the permitting process to continue the development of the copper project. Additionally, American West states that important processing and mining equipment will be ordered, which typically takes a long time to deliver.
Conclusion: With the financings announced today, American West Metals has reached a crucial milestone! This term truly applies here, as MD Dave O’Neill emphasizes, the “long-term future of the project is secured”. In our view, the Storm project is now in an excellent starting position to potentially become Canada’s next copper mine. This would elevate it to the ranks of other industrial metal mines in the region. As an example, Mr. O’Neill cites Polaris – 22 million tons at 14.1% zinc and 4% lead – and Nanisivik – 18 million tons at 9% zinc and 0.7% lead. The fact that American West has managed to enter into a partnership with a globally operating company like Ocean Partners speaks volumes about the quality of the project and the team, and once again emphasizes that the path to potentially successful development of Storm carries a lower risk compared to many other projects. Also, the fact that Taurus has agreed to make the second payment in light of the positive PEA shows the confidence that exists there in Storm and the American West team. With this, American West can now begin to take its project to the next level. We expect details on the next steps at Storm to be published in the near future!
